Textron Inc (NYSE:TXT) reported fourth-quarter financial results that surpassed analyst expectations on both the top and bottom lines, though the market's initial reaction was muted to negative. The diversified industrial conglomerate posted strong growth in its Aviation and Bell segments, driven by a recovery from prior-year disruptions and continued momentum in key defense programs.
Earnings and Revenue Performance Versus Estimates
The company's reported figures for the fourth quarter of 2025 came in ahead of consensus estimates.
- Non-GAAP Earnings Per Share (EPS): Reported $1.73, beating the analyst estimate of $1.72.
- Revenue: Reported $4.175 billion, exceeding the estimated $4.139 billion.
This performance caps a full year where adjusted income from continuing operations rose to $6.10 per share, up from $5.48 in 2024. The quarterly beat was primarily fueled by a robust recovery at Textron Aviation and sustained growth in Bell's military business.
Market Reaction and Price Action
Despite the earnings and revenue beat, shares of Textron were trading lower in pre-market activity following the report. This suggests investor focus may have shifted to the company's forward-looking guidance and cash flow outlook for 2026, or that the strong results were already anticipated and priced into the stock. The negative pre-market movement contrasts with the stock's positive performance over the past month.
Key Highlights from the Quarterly Report
The fourth-quarter results highlighted significant divergence in performance across Textron's business segments, with its core aerospace and defense units leading the way.
- Textron Aviation: This segment was the standout performer, with revenue soaring 36% year-over-year to $1.7 billion. The increase was attributed to higher volume and mix as the business recovered from a strike in late 2024. Deliveries jumped to 49 jets, up from 32, and 43 commercial turboprops, up from 38. Segment profit more than doubled to $208 million.
- Bell: Revenue increased 11% to $1.3 billion, driven by a 20% rise in military revenues fueled by higher volume on the U.S. Army's MV-75 program. Commercial helicopter deliveries remained flat at 78 units. Segment profit saw a slight decline of $9 million to $101 million.
- Industrial: Revenues declined due to the divestiture of the Powersports business. On an organic basis, revenues were up slightly, but segment profit fell by $18 million.
- Cash Flow & Returns: The company generated $1.3 billion in net cash from operating activities for the full year and returned $822 million to shareholders through share repurchases in 2025.
2026 Outlook Compared to Analyst Estimates
Textron provided its financial forecast for the full year 2026, offering a mixed picture when held against current analyst projections.
- Revenue Guidance: The company forecasts 2026 revenues of approximately $15.5 billion. This is notably below the current analyst consensus estimate for sales of $15.61 billion.
- EPS Guidance: Textron expects full-year GAAP EPS between $5.39 and $5.59. On an adjusted basis, which is more comparable to analyst models, the forecast is for $6.40 to $6.60 per share. The midpoint of this adjusted range ($6.50) sits above the provided analyst EPS estimate of $6.89 for 2026, indicating potential bottom-line strength despite the softer top-line outlook.
- Cash Flow: Management anticipates manufacturing cash flow before pension contributions to be between $700 million and $800 million, down from $969 million in 2025. This decrease reflects planned increased investments at Bell to accelerate the MV-75 program.
CEO Lisa Atherton stated, “As we move into 2026, our momentum remains strong supported by significant bookings, healthy demand across our markets, continued program execution, and ongoing operational improvements.”
For a detailed breakdown of historical earnings, future estimates, and analyst revisions, you can review the data here.
Disclaimer: This article is for informational purposes only and does not constitute financial advice, a recommendation, or an offer to buy or sell any securities. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.
